Catholic hospital cuts staff, reduces salaries in effort to stay open

By Beth Griffin/Catholic News Service

NEW YORK (CNS) — In a effort to stabilize its hemorrhaging finances and keep its doors open, the only Catholic acute-care hospital in New York laid off 300 workers, cut executive salaries by 25 percent and won temporary wage concessions from its two largest unions.

St. Vincent’s Hospital, a 160-year-old institution in Manhattan’s Greenwich Village neighborhood, is more than $700 million in debt and is using borrowed money to meet its weekly payroll obligations. The hospital is the central component of St. Vincent Catholic Medical Centers, which is sponsored by the Sisters of Charity and the Diocese of Brooklyn.

St. Vincent’s is racing against the clock. On Feb. 3 New York Gov. David Paterson established a task force of hospital leaders, commercial lenders and local officials and gave it four weeks to develop a plan to keep the hospital open.

On Feb. 11 St. Vincent’s chief restructuring officer, Mark Toney, announced temporary salary reductions of up to 25 percent for executives, medical staff leaders, directors, managers, physicians and nonunion personnel. He also said restructuring advisers were taking a 15 percent cut in their fee and that pension benefits and retirement contributions for nonunion employees would be temporarily frozen.

Three hundred workers received layoff notices Feb. 12. They included 32 medical residents, managers and union workers. In December, the hospital laid off 180 employees.

In a statement about the latest round of layoffs, Sister Jane Iannucelli, a Sister of Charity who is vice chairwoman of the medical centers, said: “St. Vincent’s is truly facing the greatest challenge of its 160-year history, and today’s actions are painful for everyone at the hospital, especially for the more than 300 positions that we have eliminated in the last week.

“To be clear, those losing their jobs have done absolutely nothing wrong and, frankly, have shown true passion and excellence each and every day. However, our financial situation is such that these steps are needed if we hope to keep our core services functioning,” she said.

In an interview in early February, Sister Jane told Catholic News Service that the hospital has been a leader in caring for the neediest and “people no one else wanted,” from 19th-century cholera victims to early AIDS sufferers who were “left on our loading dock.”

On Feb. 17, the hospital’s two largest unions, United Healthcare Workers East, which is a unit of the Service Employees International Union, and the New York State Nurses Association agreed to an across-the-board, 10 percent wage reduction for 120 days.

Toney said, “We are deeply grateful to the dedicated workforce at St. Vincent’s Hospital who are making the greatest personal sacrifices among the hospital stakeholders as we work toward stabilizing the financial crisis.”

George Gresham is president of the SEIU United Healthcare Workers East unit, which represents some 1,500 St. Vincent’s employees, including half of the laid-off workers. He called the agreement a “courageous sacrifice” and said, “Our members’ vote to accept the wage reduction is a testament to how committed they are to the work they do, their passion in providing quality care and their dedication to the patient community they serve.”

“A reduction in wages is admittedly difficult for any working family,” said Lorraine Seidel, a registered nurse who is director of the New York State Nurses Association’s Economic and General Welfare Program. The nurses association represents 800 registered nurses at the facility.

But she said that in this case, members of the association “found this decision to be a necessary one in order to save the life of the institution. St. Vincent’s Hospital Manhattan is a vital part of this community and its essential services must be maintained.”

Continuum Health Partners, a New York hospital system, withdrew a solicited proposal it made in January to the St. Vincent board to take over the hospital and turn it into an outpatient treatment center, eliminating inpatient beds and most emergency services.

Church and civic leaders have endorsed keeping the hospital open, pointing to its history of compassionate care and concern for the poor and vulnerable.

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